London markets are set for a weaker open on Wednesday as investors continue to grapple with geopolitical tensions in the Middle East, while attention in the UK turns to the latest inflation data following softer labour market figures.
Futures indicate the FTSE 100 will open around 60 points lower, or 0.6%, at 10,271.75 after the blue-chip index edged 0.1% higher on Tuesday to close at 10,330.55.
Investor sentiment remained fragile after US President Donald Trump warned that Washington could launch fresh military strikes against Iran despite ongoing negotiations aimed at ending the conflict.
Trump said he had been “an hour away” from authorising renewed attacks before postponing the operation in the hope of securing a diplomatic breakthrough, though he acknowledged further military action remained possible.
Iran responded with its own warning, with army spokesman Mohammad Akraminia threatening to open “new fronts” against the US if attacks resume.
Markets remain highly sensitive to developments around the Strait of Hormuz, where shipping traffic continues to operate at severely reduced levels, keeping pressure on global oil supplies and inflation expectations.
Brent crude held near USD110.68 per barrel early Wednesday, while gold prices eased slightly to around USD4,476 per ounce.
Analysts said persistently elevated energy prices are continuing to fuel concerns over inflation and the outlook for interest rates globally, even as economic growth indicators weaken.
On Tuesday, Wall Street closed mixed as investors trimmed exposure to semiconductor stocks ahead of results from NVIDIA.
The benchmark S&P 500 slipped 0.1% to 5,963.18, while the tech-heavy Nasdaq Composite fell 0.5% amid weakness across chipmakers and broader technology shares.
In contrast, the Dow Jones Industrial Average outperformed, rising 0.3% as investors rotated into more defensive sectors.
In Asia, sentiment was also weaker. Japan’s Nikkei 225 dropped 1.7%, while Hong Kong’s Hang Seng lost 0.7% amid continued selling in major technology names including Tencent, Baidu and Xiaomi.
